By David Rawlings, director of Business Car Finance

Having survived two recessions and read about many more, I know that this industry is one of the most cyclical.

Typically, we all become depressive as sales slow and costs increase, then we toast our amazing foresight when residual values improve and interest rates fall.

So why not use the current financial situation to your advantage and enjoy the benefits of good fleet management?

1 Introduce a low-emission policy

As a simple rule of thumb, the lower the emissions of a car the lower its wholelife cost will be.

So if ever there was a time to introduce a low-emission fleet policy, it has to be now.

From an HR perspective, employees who may have fled from a greener vehicle a year ago may see the light today when living costs are rising.

Even if they don’t, the opportunity to easily switch employers is reduced in the current climate.

2 Think about extending or re-writing contracts

Falling residual values and uncertain interest rates mean lease rates will almost certainly go up.

So it can make sense to extend existing contracts instead of taking out new ones now.

Many lease providers accept this practice as it avoids a distressed sale on their bottom line.

When normality returns, new contracts will be more realistically priced and you won’t be locked into recession-based pricing.

3 Check the competitiveness of your funder

All lease providers borrow funds, take risks and have demanding shareholders.

A tough economy sees attitudes towards risk alter and larger than average rental differences are seen.

If your lease provider is finding borrowing tough and suffering from residual losses, you may find its pricing becomes less attractive than an alternative provider.

4 Don’t focus on lease rentals or list price

Wholelife cost has never been so important.

As manufacturers start to see sales fall, some great deals will begin to appear.

But after a few months that great deal can look totally different when the tax effect is felt, increased running costs become apparent, and the driver’s tax bill hits home.

Always look beyond the headline price.

5 Buy your remaining drivers out of free fuel

Many companies refuse to consider removing free fuel, even when faced with big savings.

This madness must stop.

If the employee’s tax cost is equal to the fuel cost, you and the employee together are paying twice.

If the cost of the tax is half the fuel cost, together you’re worse off.

The solution is: do the sums, share the savings, save money.

6 Review your cash allowance policy

It’s hard to believe how many fleet cars are now privately owned. Most cash allowances were calculated when times weren’t tough.

With incomes stretched and loan defaults rising, how many drivers will have cars repossessed or ignore service and maintenance?

It will be bad enough coping with a car-less salesman but a dangerous car has dire consequences for all.

7 Put more cars on your fleet (salary sacrifice)

This isn’t madness.

It’s using tax to its best effect.

Low- emission cars and big fleet discounts equal savings.

An expanded car scheme for all employees with the employer’s cost covered by the driver can be achieved as employees who pay tax at 40% could then pay as little as 10% benefit-in-kind.

Forward- thinking leasing companies will do the administration.

8 Talk to manufacturers

Over the next few weekends, most car dealerships will look like Wild West ghost towns.

Unfortunately for manufacturers and dealers, cars are still being built, resulting in massive over-supply.

Manufacturers who would have laughed at some fleet deals a year ago may soon be beating a path to your door.

Now is the time to negotiate.

9 Review funding methods

Running a business requires serious management of capital.

When an economy is stagnant, companies face an array of issues.

Car contracts usually run for years and decisions taken today will have long-term consequences.

The sensible solution is some serious financial modelling with lots of analysis.

Most service providers can arrange this, but you need to be sure that their advice is truly independent.

10 Monitor mileage

There will always be a place for face-to-face meetings, but how many can be avoided.

The phrase ‘is your journey really necessary?’ should be asked regularly until sensible use of time and travel becomes second nature.